Question

Richards Corporation uses the weighted-average method of process costing. The following information is available for October in its Fabricating Department:

Units:
Beginning Inventory: 94,000 units, 80% complete as to materials and 25% complete as to conversion.
Units started and completed: 278,000.
Units completed and transferred out: 372,000.
Ending Inventory: 37,000 units, 40% complete as to materials and 15% complete as to conversion.

Costs:
Costs in beginning Work in Process - Direct Materials: $47,200.
Costs in beginning Work in Process - Conversion: $89,700.
Costs incurred in October - Direct Materials: $759,920.
Costs incurred in October - Conversion: $929,300.

Required:
Calculate the cost per equivalent unit of materials.

Answer 1

386,800 units

Step-by-step explanation:

Note that, Richards Corporation uses the weighted-average method of process costing.

This method focuses on units completed and units in ending work in process.

therefore,

Equivalent units calculation

Materials = 372,000 x 100 % + 37,000 x 40 % = 386,800 units

Therefore, the cost per equivalent unit of materials is 386,800 units.